United States Attorney Jenny A. Durkan
Western District of Washington

Defendant Sold Millions Worth of Insulin and Test Strips Stolen from Pharmacies Nationwide

FOR IMMEDIATE RELEASE

December2, 2011

DONALD ALAN PEPIN, 57, of Jupiter, Florida, was sentenced today in U.S. District Court in Seattle to 28 months in prison, three years of supervised release and $823,577 in restitution for wire fraud in connection with his scheme to buy and distribute stolen diabetic supplies. The scheme first came to light when the FDA Office of Criminal Investigations uncovered an Everett, Washington pharmacy technician stealing diabetic supplies from Providence Medical Center. At sentencing today U.S. District Judge Robert S. Lasnik said PEPIN “was a good and decent person who went astray and lost his moral compass…. He became addicted to the money he could make from this.” Judge Lasnik said it was important to send a message “that this type of crime, which is becoming more and more common over the internet, will not be tolerated.”

PEPIN received the stolen insulin from around the country, and then resold it through his business: First Medical Resources, Inc., based in Florida. The insulin was not refrigerated during shipping or storing, which made it unsafe for use. The insulin and test strips were sold to pharmacies and other distributors. Financial investigators determined that during the last ten years, Pepin paid in excess of $9.8 million to suppliers of stolen insulin such as Michael Ralph Worley, 43, of Camano Island, Washington. Worley was placed on leave and ultimately terminated from Providence Medical Center in November 2008, when an internal audit revealed large amounts of insulin was being ordered for that pharmacy, but not being used by patients. The investigation of Worley’s thefts and reselling of diabetic supplies ultimately led to PEPIN. Since the initial indictment in the case two years ago, over fifty individuals and business entities involved in the theft and sale of diabetic supplies have been identified for prosecution. PEPIN, Worley and three other defendants were prosecuted in the Western District of Washington. Other prosecutions have occurred in California, Michigan and Georgia.

In its request for a three year prison sentence, prosecutors wrote to the court that PEPIN’s conduct “resulted in millions of dollars of losses to hospitals, pharmacies and pharmaceutical companies. It is doubtful that business victims in this case, will ever recoup their losses…. PEPIN’s conduct also put insulin users at risk. In this case, FDA agents learned that PEPIN shipped and stored insulin without refrigeration. The government is unable to determine if any insulin user suffered as the result of PEPIN’s conduct.”

This case was investigated by the Food and Drug Administration Office of Criminal Investigations (FDA-CI), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the Everett Police Department and the Washington State Board of Pharmacy.

The case was prosecuted by Assistant United States Attorney Patricia Lally.